CHI SE FIRMA È PERDUTO

No, I’m not showing off my Italian; I know very little. But the title of this blogpost is a pun. The old saying “Chi si ferma è perduto” (he who hesitates is lost) mutated to “Chi se firma è perduto” (he who signs his name is lost) in the upheavals between 1943 and 1945, when Italy was divided by war, and signing one’s name to anything might not end well for the signer.

Charlie’s son Carlos was a partner in the restaurant. Charlie was not, although their signatures were remarkably similar. Charlie, retired from the assembly line at Ford, hung around the place with his disabled wife to look at the FL sunset.

Charlie did sign two checks when suppliers showed up and nobody was around. He signed his own name, even though he was not a signatory on the account. The bank paid anyway. And he signed two more with the authority of Mr. Roberts, the managing member of the LLC that owned the place.

As Sunset Charlie’s was sunsetting and the SOL running on the TFRPs for the $85K in unpaid FICA-FUTA, Revenue Officer K (name omitted) gets dud info from the manager of the building from which Sunset Charlie’s was evicted for nonpayment, and hits Charlie with a Letter 1153, telling him to pony up. But Charlie’s address was a PO box he shared with Carlos, who intercepted the letter.

So Charlie only gets the NFTL. Appeals confirms despite Charlie’s non-receipt beef. So Charlie gets de novo review, as he had no chance to contest the 1153 because of the interception. Judge Vasquez notes the signature on the receipt for the 1153 is Carlos’, not Charlie’s.

RO K didn’t do a thorough checkout of bank records because of the short SOL. Anyway, “RO K did not provide similar relief to petitioner because she confused petitioner’s signature with Carlos’ and was therefore under the mistaken impression that petitioner regularly signed Restaurant Group’s checks.” 2017 T. C. Memo. 35, at p. 7. (Name omitted).

Charlie didn’t file a post-trial brief, which generally (love that word) would mean he conceded the case, but Judge Vasquez gives him a bye in the interests of justice.

The test for responsible personhood, and thus TFRP, is command-and-control. Charlie wasn’t an officer, wasn’t authorized to sign the business accounts, had no hire-fire powers, had no command responsibilities, didn’t have the right to see the books, bank statements, tax returns or anything else.

Charlie just sat around with Mrs Charlie and looked at the sunset. Sort of like those dudes in Ogden, UT.

“We are not persuaded by respondent’s argument that petitioner is a responsible person because he signed and/or wrote out a small number of Restaurant Group’s checks. The four checks bearing petitioner’s signature were all signed in the span of two weeks…when Mr. Roberts was out of town (and before four of the five tax periods in question). Of these four checks… two were written and signed only after Mr. Roberts had told petitioner to do so. The other two were signed in unusual circumstances where petitioner was the only person available to take delivery of vendor orders. Such limited check signing activity does not support a finding that petitioner had sufficient control over Restaurant Group’s affairs to avert the nonpayment of its employment taxes.” 2017 T. C. Memo. 35, at pp. 16-17. (Footnote omitted, but I’ll get back to it).

And RO K did her best under great time pressure. There were only three weeks to go before the SOL ran on the unpaid trust funds.

Judge Vasquez: “We note that RO K, who was working under enormous time pressure because of the looming expiration of the period of limitations, erroneously concluded that petitioner had regularly signed Restaurant Group’s checks during the tax periods in question. We believe RO K would have withdrawn her recommendation to assess TFRPs against petitioner had she not confused Carlos’ signature with petitioner’s.” 2017 T. C. Memo. 35, at p. 17, Footnote 14. (Name omitted).

An author, teacher, advocate and trusted advisor, Lew Taishoff is a New York City-based attorney with 51 years of experience in corporate and individual tax and real estate matters. He is an Enrolled Agent, examined and admitted to practice before the Internal Revenue Service, and admitted to practice before the United States ... Continue reading →